Building a sustainable supply chain
An IKEA case study

Page 5: The tertiary sector

Businesses in the tertiary sector provide a service, such as banking, transportation or retailing. They do not extract the raw materials or make products themselves. 11% of businesses within the UK are retailers. 

In the tertiary sector, IKEA's retail stores add value to manufactured goods by providing a form of shopping different to the usual high-street experience. IKEA has more than 260 stores in over 36 countries. These meet the needs of consumers in a number of different ways:

Retailing turnover in the UK was more than £250 billion in 2006. 

• Each IKEA store is large and holds more than 9,500 products giving lots of choice.
• Within each store, there are a number of realistic room settings that enable customers to see what the products would look like in their own homes.
• The IKEA store is built on a concept of 'you do half, we do half; together we save money'. This refers to, for example, the customer assembling furniture at home.
• Customers handpick products themselves using trolleys.
• IKEA provides catalogues and home delivery to save customers” time.
• IKEA stores have restaurants that provide Swedish dishes alongside local food choices.

To make its activities more sustainable, IKEA has set up many local UK initiatives:

• In 2006 IKEA UK recycled more than 70% of its waste products. Its goal is to recycle 90% of materials.
• To reduce environmental impact, in 2006 IKEA UK started to charge for carrier bags. This reduced the use of carrier bags by 95%. In June 2007 IKEA UK removed carrier bags from its stores completely.
• In December 2006 IKEA UK gave a brand-new folding bike to each of its 9,000 employees. It also gave subsidised travel tickets to encourage them to travel to and from work on public transport.
• IKEA UK has provided low-energy light bulbs to its entire UK workforce and switched its fleet of company cars to low-emission hybrid models.